A month after the Justice Department said it would review the decades-old regulatory agreements governing the music licensing agencies Ascap and BMI, the world’s biggest song publisher has threatened to end its relationship with those groups if the changes it wants are not made.
The announcement, made by Sony/ATV Music Publishing — whose catalog of more than two million songs includes Beatles classics as well as current hits by Taylor Swift and Lady Gaga — comes as the music publishing world ponders major structural changes, in response to the rise of online streaming services like Pandora, Spotify and YouTube, which critics say pay too little in royalties.
In a letter to tens of thousands of Sony/ATV songwriters, Martin N. Bandier, the company’s chairman, addressed some of the issues facing the world of music publishing, including the Justice Department review and Ascap and BMI’s legal battles with Pandora over licensing.
If those matters turn out badly for the publishing world, then Sony/ATV would consider “the potential complete withdrawal of all rights from Ascap and BMI,” Mr. Bandier wrote in the letter, sent Wednesday.
Executives at major publishers like Sony/ATV and Universal Music Group have, in the past, discussed leaving Ascap and BMI, which handle the licensing of performing rights to outlets like radio, television and online services.
But Mr. Bandier’s letter highlighted the speed with which big publishers are preparing for a possible future without the two agencies. Two weeks ago, Universal announced a plan to make all of its song catalog data available online, a move that could allow it to bypass the licensing agencies. Sony/ATV is said to be working on a similar effort.
A publisher exodus would severely diminish Ascap and BMI, which together process almost $2 billion in royalties each year.
Musicians of all kinds have long complained about minuscule earnings from streaming services, which usually pay fractions of a cent each time a song is played. But songwriters say that outdated licensing rules — and the decline of separate royalties from CD and download sales — have made their losses particularly acute.
“It’s almost like their 401(k)’s have been wiped out in a heartbeat,” Mr. Bandier said in an interview on Thursday.
Despite the small sums that musicians sometimes report, streaming music has proved the music business’s only growth area. For the first half of 2014, 70.3 billion songs were streamed through on-demand services like Spotify and YouTube.
Pandora’s litigation with Ascap and BMI was prompted by the publishers’ attempts to change their relationship with the licensing agencies by making “partial withdrawals” of their rights. Under this plan, Pandora would be forced to negotiate directly with publishers — and thus pay higher licensing fees — while Ascap and BMI would continue to represent the same songs for other kinds of outlets, like radio and TV.
That effort was rejected by judges, but publishers — as well as Ascap and BMI themselves — have asked the Justice Department to amend their regulatory agreements to allow them.
Stuart Rosen, BMI’s general counsel, said in response to Sony/ATV’s letter that the Justice Department should give publishers flexibility in how they use the rights agencies to license their music. “An all-or-nothing choice is not in the best interest of songwriters, composers and publishers,” Mr. Rosen said.
Jesse Harris, a Sony/ATV songwriter best known for writing some of Norah Jones’s biggest hits, pointed out that songwriters often relie on royalties more heavily than performing artists.
“These royalties are important to us,” Mr. Harris said.